wonderchild

Triple, Grande, Skinny Caramel Latte

posted Thu, 06-19-08

Yes, that is my drink.  The folks at Starbucks (in Denver no less) told me how to say it correctly so that it would get made correctly every time.  It's a high maintenance drink and sometimes I'm a high maintenance kinda girl.  Sometimes I'm low key.  Again those Libra scales.  But I don't always order this.  Sometimes, I order plain coffee, sometimes I order a frappicino (which are bad on the hips and wallet) and sometimes I order tea.

So what's been on my mind.  Well, many people know that I work mostly in the energy space at my consulting firm, so I am constantly reading about energy policy, companies, taxes, carbon credits, etc. etc. I've written before about why I think gas should be $6 or why it should have been a lot more expensive, but I'm going to lay it out in a more simplistic fashion and this doesn't even address the consumption of electricity.

The US government has not increased the federal gas tax in over 15 years.  This tax pays for federal highway maintenance, DOT, etc.  This worked fine when the US was the major importer of gas from shady nations where 99.99% of the wealth is in the hands of a few who try to promote their world view while harboring or setting up conditions to promote terrorists.  (Read this article for an example.) Between lobbying from the oil companies, Detroit (who made gazillions off of gas guzzling SUVs), and the rest of uses of petroleum (Vaseline, hair grease, the list goes on and on) we had a vested interested in keeping gas low and it was easy, we consumed the most oil and everybody was nice to us.  But look where it has gotten us.

Gas has always been taxed extremely high in Europe.  Their cars are smaller, more efficient, their appliances run on less electricity, and they were first in line for alternative energies such as wind.  Now for a variety of reasons the full on European model would not work in the US, but inflation adjusted, gas prices have actually been falling in the US.

Imagine where we would be if the government had at least kept the price of gas adjusted for inflation using taxes.  The shock of prices which have more than doubled in the past 7 years, could have been more slowly absorbed, lifestyles could have shifted, we may have more funding for alternatives, we would have better highways, more efficient, trucks, etc.    Infrastructure that would reduce our dependence on foreign oil would already be in place.

Now there is a scramble to switch to smaller cars - biomass, ethanol (and corn is the worst ethanol out there), wind, solar are all buzz words and everybody complains at $4 gas.  All of us environmentalists were hemp-wearing, hirstute, crazies 10 years ago saying we needed to stop guzzling gas.  But now, our chickens have come home to roost.  We can't adjust in the short-term and we could drill in Alaska, the Gulf and all of our other off limit places, but those are temporary solutions.  We needed this band-aid ripped off and we are going to have to endure the pain before we can get to the healing  And the sad part is that those that can least afford it , are the ones paying the most for it.  So we can't go back and change the past, but how are we going to change the future?

Before I write my thoughts anybody else? 

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1. Daddy left...
Thu, 06-19-08 3:09 pm

I thought your examples and reasoning a little scatterred, they followed your main line, but not always cogently supported. I think , long term, two other points are important to understand long term demand, and the potential for increasing prices. One, China. The elephant in the room. Its demand is growing at incredible rates and will soon put immense pressure on pricing related to current global capacity/production. Unfortunately, new production facilities have not been added, and time and capital expenditures will be long and huge--running well behind the voracious consumption by China, Asia, SA and even the West. Secondly, short-term, speculators have made a run on oil unrivaled in modern times. On Carnegie, Vanderbilt, and the Huntr brothers in the 60's/70's with silver have driven a market through interstellar space. given the fluency and liquidiity of global capital, the feeding frenzy was instantly picked up as a way of maxing shjort term returns over the intermediate period. The market offered no resistance--supply reduction, government intervention, populous protest--so speculators have free reign and wind shearing profits completely out of touch w/ production/refining expenses/cost and historic profit margins. The instertion of global spectulars is a new paradigm of commoity wealth and power that fliies under the regualtion and monitoing of tradtional means, but reeks havoc at the pump.

Bicycles made in Taiwan or China ar availabe at Wal-Mart for under a $100. A neat, urban alternative to fossil. I rode for 7 years!